Author: Edith M.

Edith is an investment writer, trader, and personal finance coach specializing in investments advice around the fintech niche. Her fields of expertise include stocks, commodities, forex, indices, bonds, and cryptocurrency investments.

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Cryptocurrencies

Tether Review: How Safe or Stable Is This Stable Coin?

Tether is a pioneer of a hybrid class of blockchain-based crypto coins referred to as Stable coins. These were developed with the sole purpose of addressing cryptocurrency volatilities synonymous with

Tether is a pioneer of a hybrid class of blockchain-based crypto coins referred to as Stable coins. These were developed with the sole purpose of addressing cryptocurrency volatilities synonymous with

Tether is a pioneer of a hybrid class of blockchain-based crypto coins referred to as Stable coins. These were developed with the sole purpose of addressing cryptocurrency volatilities synonymous with cryptocurrencies such as Bitcoin and Ethereum. The stability of Tether is made possible by the fact that each Tether coin issued is collateralized by traditional fiat currencies on a 1:1 ratio. The most popular stable coin today is the US dollar Tether(USDT). 

But how safe and effective is the pioneer stable coin? Who can use this stable coin? What challenges has it faced to date, and what have been some of its solutions? We address these all in this comprehensive Tether Review.

What is tether, and how does it work?

Tether is a digital currency that seeks to provide you with the benefits of both an open-sourced blockchain technology and traditional fiat currency. According to Tether Limited, their systems convert cash deposits into digital coins whose value is tethered to the price of global currencies like the USD, EUR, and Yen. The company also claims to hold fiat currency in reserves that are equivalent to the Tether coins in circulation today. These Tether coins are then used to facilitate different crypto transactions. For instance, pure crypto-to-crypto exchanges, USDT serves as an alternative to the US Dollar.

Who can use the stable coin?

Like most other cryptocurrencies, there are no restrictions on the use of Tether across the globe. The stable coin has, however, received mass adoption by crypto traders and investors operating in crypto exchanges that do not accept fiat currencies. In this case, the stable coin has been used to load cash in an out of the different markets. Additionally, these crypto industry players have also been using the crypto coin as a hedge against different investments. Note that the increased circulation of these coins has also seen most crypto enthusiasts embrace Tether as a store of value.

How safe is Tether?

Tether derives its stability and safety from the fact that it was designed to always be worth $1.00. The unwritten rules of engagement between Tether and its USDT coin holders are that Tether Limited will, at all times, maintain a cash reserve of $1.00 for every tether issued. The company further promises to regularly audit and make public the company’s financial records.

These would show how much Tethers coins are in circulation at any given time and their cash and cash equivalent backings. While this sounds interesting, it should be noted that there is no contractual agreement between Tether Limited and its clients towards the fulfillment of this or other promises. We address these in detail in the risk and concerns section below.

Risks and concerns:

☑️Lack of proper auditing:

While Tether Limited claims to have backed tether coins 1-to-1 with traditional fiat currencies, they haven’t audited their financial records in more than two years. This didn’t go unnoticed by the crypto community, who demanded to know the ratio with which the company backs its stable coin. In reaction to this, Tether Limited had its lawyers – and not an audit firm  – release a report about the same. Our concerns aren’t just on the lack of proper auditing reports but the qualifying language these lawyers use in drafting this report.

☑️The legitimacy of Tether reserves:

The lack of verifiable and reliable audit reports from Tether Limited makes us question their claim of 1:1 tether to fiat currency reserve. And our concerns are only aggravated by the fact that USDT coin holders don’t have the legal power to demand an audit from Tether Limited. The 1:1 reserve is just a promise that Tether can break anytime.

☑️Bitfinex – Tether collusion:

There were reports and that Bitfinex and Tether – both share common management – were using USDT to manipulate Bitcoin price. These reports that saw Bitfinex exchange Subpoenaed by the New York Attorney General claimed that Bitfinex was creating Virtual USDT and using it to wash trade Bitcoin. In another incidence, the New York Attorney General’s office accused Bitfinex of Using Tether’s funds to cover over $850 million missing funds. Both instances make us question the independence of Tether and its fiat currency reserves.

What we like and don’t like about tether

what we like:

It reduces transaction time: Bank deposits and withdrawals in and out of different crypto exchanges can take between 1 to 4 days to process – or more during weekends. Tether transactions, on the other hand, take no more than a few minutes to complete.

Lowers transaction fees: Having to deposit and withdraw funds in and out of the bank every time you need to enter into a crypto position isn’t just tedious, but it is also expensive. Tether transactions are cheaper and relatively fast.

A safe haven during periods of unsustainable volatility: What happens when your preferred crypto assets hit unsustainable highs? The best move here is to cash out and wait for the coin to dip before making another buy. Tether presents you with the perfect safe-haven for your investments away from risky volatilities and the often-high withdrawal and deposit fees.

Downsides to the use of Tether:

Zero-interest: The fact that Tether will always be valued at $1.00 implies that you don’t stand to gain from price fluctuation of interest. This makes it less attractive than bank deposits.

Riskier than bank deposits: Banks are highly regulated, regularly audited, and deposits therein insured. Tether isn’t regulated and doesn’t live to its promise of transparency through regular audits. Furthermore, should you lose Tether funds, there is no guarantee that you will be compensated.

Where can you trade tether?

Virtually all major crypto exchanges and a significant number of medium-sized exchanges accept USDT trades. The coin’s popularity within the crypto community is evidenced by the fact that it currently appears on the top-ten list of most traded crypto coins.

Final word

Tether has made significant contributions towards taming the crypto industry volatilities. It has provided traders and investors with an inexpensive, safe haven for their coins. It has also significantly cut down on time wastage experienced with bank transactions. There, however, are major concerns with regards to how Tether Limited manages their fiat reserves. These have dented the crypto community’s trust in the stable coin through breach of promise and lack of transparency. You, therefore, need to exercise caution when dealing with this controversy-rigged stable coin.

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Crypto Daily Topic

The Eighteenth Million Bitcoins Will have Be Mined by the of This Week

This week marks a milestone in the life of the world’s first cryptocurrency – Bitcoin. Blockchain.com, the cryptocurrency monitoring platform, reported that the total Bitcoins in circulation had reached 17.72

This week marks a milestone in the life of the world’s first cryptocurrency – Bitcoin. Blockchain.com, the cryptocurrency monitoring platform, reported that the total Bitcoins in circulation had reached 17.72

This week marks a milestone in the life of the world’s first cryptocurrency – Bitcoin. Blockchain.com, the cryptocurrency monitoring platform, reported that the total Bitcoins in circulation had reached 17.72 million by October 14, 2019. It will take the days before next week to mine the remaining amount to 18 million.

It has taken Bitcoin slightly over ten years to expend 85.7 of its total supply, which is quite the metaphorical “drop in the ocean” when compared to the 120 more years it will take for the total number of coins to be mined.

120 Years?

For many people in the crypto community, this seeming discrepancy might prove confusing. How can it take ten years to mine 18 million coins and 120 years to mine the remaining 3 million? The answer is in the network creator’s genius model, which is built to make the currency appreciate as the years go by, rather than devalue.

Now, the number of Bitcoins is finite. There can only be 21 million coins in supply, and when one day all coins are mined, no new ones will be introduced.

Miners get block rewards (free coins) every time they mine new coins. As time goes on, the block rewards are halved – for every 210,000 blocks mined.

When Bitcoin was new, miners could receive 50 coins for every block. The first halving was in 2012, bringing the rewards to 25 coins. The next halving happened in 2016, cutting the rewards to 12.5. The next one will occur on May 2020, making the reward 6.25 coins.

If the Bitcoin protocol remains intact and the halving process remains consistent, Bitcoin will reach the maximum supply cap in 2140.

Bitcoin Investors Are “HODLing” More Than Ever

Meanwhile, the number of addresses hodling 1000+ Bitcoins has increased, as people stockpile on the currency. 

On-chain analyst Glassnode (on-chain refers to transactions that occur on the Blockchain and are only valid when it’s modified to reflect them) has highlighted that the number of Bitcoin wallets holding more than 1000 BTC is now 2100 separate wallets. More wallets are holding bitcoins in the 1,000 – 10,000 bracket more than in any other bracket.

Similarly, the number of bitcoins in wallets with 1000+ wallets has gone from strength to strength: from 6, 919, 950 in September 2018 to 7, 184, 501 in January this year, to 7, 530, 446 as of October 14, 2019. 

These numbers indicate that as we approach the next “halvening,” people are buying Bitcoins in larger volumes, as further indicated by the recent increase in hash-rate discussed in more detail below. 

Bitcoin’s Hash Rate Is at an All-Time High

The hash rate for Bitcoin is also at an all-time high of 110.19 EH/s after being on a steady increase for the last two years – according to the cryptocurrency analysis website Bitinfocharts.com. Hash rate is essentially the rate at which a crypto-miner is working. The faster they are working, the higher the hash rate, and the quicker they can solve the next block and claim their reward.  

Just in July this year, the hash rate was 80 EH/s and has since grown by 37% in that short amount of time. In September, it hit 100 EH/s for the first time ever, with new highs regularly being achieved for the network. A high hash rate indicates surging mining activity on the Bitcoin network. This could be due to more miners scrambling to acquire more block rewards, or simply due to more efficient mining rigs entering the industry. 

Effect of Halving on Miners and a Next-Generation of Mining Rigs

With the next Bitcoin halving event being only six months away, the mining rig industry is rushing to roll out sophisticated and more powerful hardware to meet changing demands. As the reward rate goes down from the current 12.5 bitcoins for each mined block to 6.25, miners will want to mine even faster to get more coins within shorter time frames.

As such, we are witnessing a new wave of mining rigs, each more powerful than its predecessor. Some of the types of equipment are even up to about 500% more powerful than the older models, in terms of hash rate. 

Going by Bitcoin’s previous halving events, the crypto is likely to witness an upswing in the year before and after the event. This is especially likely, considering the currency continues to show strongly this year. Assuming that it remains on that path in the next few months, chances are it will experience an upswing after the next halving.

Bitcoin After 2140

One of the crucial aspects of Bitcoin’s survival is miners – the people who secure the network and verify transactions. Thus, a legitimate question is: what will happen to miners after every Bitcoin has been mined? After all, there won’t be any financial motivation – they will not be able to exchange their block rewards with cash. Will Bitcoin continue to function?

Fortunately, the network’s creator, Satoshi Nakamoto, envisioned this and addressed it with this statement: “Once a predetermined number of coins have entered circulation, the incentive can transition entirely to transaction fees and be completely inflation free.” What this means is besides block rewards, the Bitcoin protocol also provides transaction fees as a “compensation” option.

The transaction fees will rise after the maximum supply is reached; hence, mining will not be a loss. The only caveat is: currently, the fees pale in comparison to the reward of Bitcoins. However, as the rewards continue diminishing, the transaction fees will increase. The final result is the transaction fees will become valuable enough so that miners should continue verifying transactions. So, while new Bitcoins cease to enter into circulation, Bitcoin miners still get a payday. 

As these exciting chapters for the world’s pioneer’s currency continue to unfold, we can only wait and see how it holds up. It should particularly be interesting to see the coin prove its mettle after the next “halvening.”

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Cryptocurrencies

Bitcoin Cash (BCH) – Everything You Need to Know

We cannot talk about Bitcoin Cash without understanding the fundamentals of Bitcoin. Bitcoin was created in response to the financial crisis of 2008/2009. Satoshi Nakamoto, the creator of this revolutionary

We cannot talk about Bitcoin Cash without understanding the fundamentals of Bitcoin. Bitcoin was created in response to the financial crisis of 2008/2009. Satoshi Nakamoto, the creator of this revolutionary

We cannot talk about Bitcoin Cash without understanding the fundamentals of Bitcoin. Bitcoin was created in response to the financial crisis of 2008/2009. Satoshi Nakamoto, the creator of this revolutionary network, envisioned a world where people would transact financially without the need for intermediaries. Bitcoin did not just eliminate intermediaries in financial transactions. It also made transactions more secure, convenient, and faster.

However, scalability issues, slow transaction speeds, and extortionate transaction costs associated with BTC prompted some stakeholders to discuss proactive measures to counter rising resistance from different quarters and competition from emerging solutions. This led to the ultimate birth of BCH – or bitcoin cash.

The Birth of Bitcoin Cash

Bitcoin Cash was launched in August 2017 by the Bitcoin network as its hard fork, with the primary objective of improving scalability. A hard fork is simply an alternative of the original coin – the BTC. And since the alternative – in this case, the Bitcoin cash- could not be accepted by 100% of the users, there was a split. And this led to the birth of the Bitcoin Cash.

In this case, Bitcoin cash is similar to the original bitcoin, but not necessarily identical. Bitcoin cash was born as a result of the recommended updates to the BTC’s protocol that were not agreed upon by everyone.

To understand the need for BCH, we need to pause a little and reflect on some of Bitcoin’s limitations: the block size and scalability issues. Well, as you may know, transactions on the Bitcoin network are confirmed in blocks. And a single block is confirmed every 10 minutes. The maximum size of each block is 1Mega Bite, which can only hold a maximum of 2700 transactions. This, in turn, limits the Bitcoin network to about 2700 transactions every 10 min, which translates to 4.6 transactions per second.

Comparing that to the VISA network that processes 1700 transactions per second, you will understand just why Bitcoin scalability was an issue. As a result, two separate camps emerged with solutions to this scalability. One camp suggested the need to have the block size increased from the current 1mb to 8mb. Such that the network would be eight times faster. The second camp was against the whole idea of increasing the block size and instead looked for solutions to optimize transaction size handling. This debate went on for a while and eventually led to the proponents of a bigger block size creating the Bitcoin cash.

BCH key achievements

☑️Bitcoin Cash has comparatively cheaper transaction fees, estimated at $0.20 per transfer. That means people will save a lot of money, unlike with Bitcoin, which charges around $1 per transaction. It should be remembered that charges once shot up to an all-time high of $30 per transaction on the bitcoin network.

☑️Bitcoin Cash is way faster in processing transfers, so you won’t have to wait for an hour for a transaction to confirm.

☑️With Bitcoin Cash, more people can transact at the same time as it is capable of processing numerous transactions per second – 116 transactions per second. That is not the case with Bitcoin.

The above features have been made possible as a result of the Bitcoin Cash block expanding to 8 times larger than a Bitcoin block. This has consequently made BCH not only cheaper and faster than BTC but also a lot more scalable. That would explain why more people are adopting BCH as their preferred cryptocurrency in a fast-developing digital market.

Valuation of Cryptocurrencies – Bitcoin Cash Vs. Bitcoin

As a novice, you may be wondering where cryptocurrencies derive their actual value. Naturally, cryptocurrencies such as BCH and BTC get their value from their levels of adaptation, and that includes their use and demand.

Analyzing them from the points of growth in value as well as ROI, these two currencies hold substantial value. Bitcoin has been around for much longer and is more valuable, but Bitcoin Cash has been consistently gaining users, and hence, its value has continued to soar.

Bitcoin Cash may be one of the newest entrants into the market, but how it sought to address the drawbacks associated with “established cryptocurrencies” can only suggest good times ahead. First and foremost, scaling issues synonymous with Bitcoin are considered a major turn off to potential investors, and the fact that Bitcoin Cash conclusively addressed them comes as good news from every perspective you look at it.

The projection on the ground spells dark times ahead for Bitcoin unless their developers work harder in fixing the issues pointed out. In the meantime, Bitcoin Cash will continue serving as the popular choice for more people who would wish to transact with reliable cryptocurrency.

Conclusion 

Given how the globe is embracing crypto technology as an alternative to traditional banking and trade, structural advancements on Bitcoin Cash (and other cryptocurrencies) are inevitable. As we grasp with the growth of the digital scene, everything points towards a convenient, cost-effective way of transacting. Whether BCH will eventually attain its goal as the ultimate solution or not, we have already seen and experienced its purpose in wholesome. Save for the wars of recognition, all that seems to matter is how far or how strong BCH will hold on, and how it will push other currencies to follow suit in simplifying money transfer and trade in general for generations to come. 

So far, so good. The lines are being drawn on the distinction between Bitcoin and Bitcoin Cash. It doesn’t matter who produces the goods, but what the world needs is a reliable, consistent currency that puts the interests of the masses first. 

 

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Cryptocurrencies

Binance Coin: All you need to know

Binance coin is a crypto token created by the cryptocurrency exchange platform Binance. The coin is denoted by the symbol BNB. Launched in July 2017, the cryptocurrency initially ran on

Binance coin is a crypto token created by the cryptocurrency exchange platform Binance. The coin is denoted by the symbol BNB. Launched in July 2017, the cryptocurrency initially ran on

Binance coin is a crypto token created by the cryptocurrency exchange platform Binance. The coin is denoted by the symbol BNB. Launched in July 2017, the cryptocurrency initially ran on the Ethereum blockchain until Binance launched its own blockchain – the Binance chain. Binance coin has an overall limit of 200 million tokens.

The Binance Platform

Binance was founded by Changpeng Zhao, also known as CZ by crypto enthusiasts. It’s a global cryptocurrency exchange that’s currently the biggest crypto trading platform, at least by volume.

Users of the platform can use BNB to pay for fees on the Binance platform such as listing fees, exchange fees, trading fees, withdrawing fees, and any other fees. Like any other cryptocurrency, the coin can be traded against other supported cryptocurrencies.

Security Model and Transaction Processing

Binance Chain uses the Tendermint byzantine-fault-tolerant as a consensus protocol. This mechanism uses several types of nodes:

Validator nodes – a selection of the network community who vote to validate transactions

Witness nodes – These nodes witness the consensus mechanism and broadcast transactions to all other nodes  

Accelerator nodes – these nodes speed up the transaction process

Monetary Policy of Binance Coin

BNB’s market cap is at 200 million tokens. At its launch and Initial Coin Offering in 2017, 100 million tokens were released to the public, 80 million to the founding team, and 20 million to angel investors (high-net-worth individuals who provide financing for a startup in exchange for equity in the company).

Binance coin’s first year provided a 50% discount on trades, with the discount reducing by half each following year. The discount will end from the fifth year going forward.

To combat devaluation of the currency, Binance plans to use 20% of its profits to buy back Binance tokens and burn them until only 50% of Binance tokens are remaining in the market. (Coin burning means removing coins from circulation permanently, reducing a coin’s circulation. The burning process is recorded as a transaction on the blockchain, and it’s thus completely transparent)

How is Binance Coin Different from other Cryptocurrencies?

Binance differs from other cryptocurrencies like Bitcoin, Ether, Litecoin, etc. in at least these two ways:

First, It is an integral part and will, in the future, become the native currency of the Binance platform.

And secondly, users of Binance can use the coin to pay for the trading fees of the platform, which is way cheaper than paying the full fees

How to Buy and Store Binance Coin

If you wish to own Binance coins, you can acquire them via a cryptocurrency exchange. Since the Binance platform is a crypto exchange itself, you can get BNB by trading it with over 100 currencies. You can also trade BNB on IDEX, Gate.io, Trade Satoshi, etc. You can also buy it directly from Eidoo, Invest Feed, Kyber Network, etc.

Crypto coins are very soft targets for hackers – so it’s crucial that you safeguard them by securing them in a wallet. Some popular wallets where you could keep your Binance coin are Trust, Trezor, Enjin, Blox, Request, Metal Vault, Jaxx, Ledger, etc.

Uses of Binance Coin

☑️Buying goods and services across various establishments 

Binance coin has enabled various ways of using BNB to pay for products and services in an increasing number of businesses. An example is TravelbyBit, an Australian startup that has unlocked the ability of Binance and many other cryptos to be used by more than 150 establishments.

☑️Paying for trading fees on Binance

Crypto traders can save money by using BNB to cover crypto trading fees in the crypto exchange platform.

☑️Investing in other cryptocurrencies

You can use Binance coins to invest in new and innovative cryptos that are listed on Binance’s token launch program: the Binance Launchpad.

☑️Securing cash when you need it

Binance coins can be used to acquire loans through Nexo – a crypto-based loan platform, or exchange BNB for cash through Dether – a platform that allows people to trade the coin for money.

☑️Paying for certain social media services 

Social media has become an important part of people’s lives all over the world, and BNB is being used for various functions on social networks. For example, the coin can be bought on Investfeed – the crypto social network, or as a gift token on Uplive, a video streaming platform.

☑️Trading as an altcoin

Binance Coin can be traded on several cryptocurrency exchanges, including on the Binance platform. Other exchanges include Komodo, IDEX, kyber.network. 

Should You Invest in Binance Coin?

When deciding whether to buy (and invest) in Binance coin, consider the following facts about the currency:

Binance coin has witnessed unprecedented success and in a short amount of time. In only two years, it has achieved a 2.8 billion market capitalization.

A dedicated and industry-savvy team backs the Binance platform. This team had also enabled the crypto to stave off insecurity issues such as in 2018 when they successfully repelled a malicious attack.

As of October 2019, the price of the coin is $18 – a growth of more than 10,000% since its launch

Its progressive economic model of burning coins should see it continue to increase in demand and token value.

Conclusion

Binance coin has become a force to be reckoned with in the crypto space. Cryptocurrency traders can not only invest in the coin but also use it to duck high fees while trading on the Binance platform. And with the current growth rate of the currency, it is set to increase in value, especially after the launch of its own blockchain. Thus, BNB is a great asset option to add to your portfolio.

 

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Cryptocurrencies

Understanding Litecoin – A step by step guide

Litecoin is a peer to peer, decentralized digital currency that is based on the Bitcoin protocol. It uses Scrypt as its proof of work (an algorithm for confirming transactions by

Litecoin is a peer to peer, decentralized digital currency that is based on the Bitcoin protocol. It uses Scrypt as its proof of work (an algorithm for confirming transactions by

Litecoin is a peer to peer, decentralized digital currency that is based on the Bitcoin protocol. It uses Scrypt as its proof of work (an algorithm for confirming transactions by other network participants). Litecoin (LTC) uses blockchain technology to maintain a public ledger of all transactions. The currency is referred to as Bitcoin’s lighter sibling as it was created using the Bitcoin source code, but it can be mined 4 times faster than Bitcoin (BTC). This, in addition to its lower price, makes it more suitable for faster, everyday purchases.

History of Litecoin 

Litecoin was created in 2011 by Charlie Lee, a former Google employee. It was released on October 7, 2011, via the open-source client GitHub, with the network going live on the 13th of the same month. This makes it the first altcoin – a term used to describe all other cryptocurrencies besides Bitcoin.

Since it was launched, it has experienced stable growth and ranks 7th in market capitalization today. Charlie’s mission was to create a cryptocurrency that had the same tight levels of security like Bitcoin, but more suitable for everyday transactions.

Differences between Litecoin and Bitcoin

Litecoin is, by its creator’s own admission, a clone of Bitcoin. If we are to understand Litecoin, comparison with Bitcoin is therefore necessary. These characteristics set the two cryptos apart: 

☑️Mining Algorithm: Both currencies use a proof-of-work algorithm. Bitcoin uses the SHA-256 algorithm, whereas Litecoin uses Skrypt. The SHA-256 is famous for its complexity and uses more power, while Scrypt is computationally less intensive and uses more memory, but also less power.

☑️Transaction Speed: Litecoin’s block time, i.e., the time it takes to process a block, is 2.5 minutes while Bitcoin’s is 10 minutes. This makes Litecoin 4 times faster and also more capable of processing more transactions in any time frame.

☑️Total Coins: Bitcoin has a market supply of 21 million coins, while Litecoin maxes out at 84 million. While it would appear that Litecoin has more potential, both cryptos have the ability to be broken down and transferred in very tiny amounts (for example, the minimum for BTC being a hundredth million or 0.000 00001). With both currencies being able to be divided down so much, the cost of one full coin is not consequential as it may seem.

☑️Rewards: When someone mines a block, they are rewarded a certain number of coins for their contribution to the network. The current block reward for both BTC and LTC is 12.5. Bitcoin’s rewards are halved after every 210,000 blocks have been mined while Litecoin’s reward halving happens after every 840,000 blocks. Because of the block time difference of 2.5 min and 10min for LTC and BTC, respectively, there is more opportunity for LTC miners to be rewarded. 

Current Litecoin Statistics

Litecoin is currently trading at $55.92, with its market cap being $3.5B. Its 24-hour volume is $2.6B and its circulating supply of 63, 476, 342 with a maximum supply (market cap) of 84 million. Its All-Time High was $375.29 in December 2017 with its All-Time Low being in January 2015 at $1.11. 

Characteristics of Litecoin

Just like with other mineable cryptocurrencies, Litecoin has several familiar elements that differentiate it from other types of digital currencies. Some of these are:

☑️Pseudonymous addresses – meaning users can transact without revealing their personal credentials, but the public address still having the possibility of being linked to them

☑️Blockchain – which is a public ledger where all transactions are recorded  

☑️Block Rewards – people who perform the computational work to effect transactions on the BLockchain are rewarded with a specific number of LTC coins   

☑️Transactions are peer to peer (meaning between two computers, without a regulating authority), and are censorship-resistant (meaning no corporation or government can interfere with them) 

How to Invest in Litecoin 

Investing in Litecoin means swapping your currency for Litecoin currency. For instance, 1 Litecoin is equal to $54.81 today. When the value of Litecoin rises, you can exchange Litecoins back to dollars. To invest in Litecoin, you need a digital wallet. So far, Coinbase is one of the best digital wallets where you can buy/sell and store your Litecoins and other cryptocurrencies.

What are the Risks of Trading Litecoin? 

As with other cryptocurrencies, there is not much history to compare the future performance of Litecoin. Since it’s still so “young”, the question of how you can estimate its future value is difficult to answer. Here are some risks associated with trading Litecoin: 

  • Changes to international capital controls may cause a decline in demand for cryptocurrencies. Countries such as China have laws that regulate the flow of capital out of the country – driving people to invest in cryptocurrencies to circumvent such restrictions. A change in these laws could affect Litecoin’s demand.    
  • Cryptocurrencies are still largely unregulated, rendering them a risky option for some
  • Litecoin is prone to market fluctuations – though many investors regard this is a positive risk 

Uses of Litecoin

Litecoin can function as any fiat currency (money that has been declared by the government as legal tender), and it can be used to pay for goods and services. An increasing number of businesses are accepting Litecoin as a legitimate means of exchange. From pet supplies to jewelry to cars to music to health and beauty, food, and travel, there are many places where the currency can pass.

You can also transfer quickly Litecoin to anyone, anywhere, thanks to its short block time and confirmation rate. 

Also, due to its often wild fluctuations – much like other cryptocurrencies, it is a very attractive investment for investors, who can bet on its exponential increase at any given time.  

Conclusion 

Litecoin has witnessed steady growth since its creation and by the look of things, it will only become stronger. This is due to its impressive processing time, and its adoption by trusted crypto exchange and storing platform, Coinbase. Remember, before investing in Litecoin or any other cryptocurrency; it’s important to do your research.

 

 

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Cryptocurrencies

Understanding Ethereum – A Step-by-Step Guide

When we thought we had heard it all about blockchain, and what it does, Ethereum sprang up. To many, it was seen as just another Bitcoin, but what most people

When we thought we had heard it all about blockchain, and what it does, Ethereum sprang up. To many, it was seen as just another Bitcoin, but what most people

When we thought we had heard it all about blockchain, and what it does, Ethereum sprang up. To many, it was seen as just another Bitcoin, but what most people didn’t know was that the project presented a timely idea, and a life-changing one whose implementation was bound to lead the world to new paths.

I know you’ve probably heard about Ethereum, but you’ve probably dismissed it as just another crypto. But what is it in the first place? Could it be just another crypto? Is it the same thing as ether? And what is it used for? Well, in this article, I’ll be expounding it in detail to answer these and to show you why Ethereum is not just another crypto.

What is Ethereum?

For starters, Ethereum is a software platform that allows developers to generate and deploy decentralized applications that are accessible globally. If you want to create a decentralized application, that not even you can control, then the Ethereum platform is the place to go. All you need to do is understand Ethereum’s programming language – solidity – and begin coding.

In simple words, Ethereum is the infrastructure that lets you run decentralized apps worldwide.

You will find some people using the words Ethereum and ether interchangeably. So is Ethereum and Ether one and the same thing? Well, let’s find out.

Ethereum and Ether – Are they any different?

The concept of Ethereum and Ether can be a little confusing. When we hear Ethereum, we are quick to associate it with other cryptocurrencies like bitcoin. To make it clearer, Ethereum is a platform built on blockchain where developers can build and deploy thousands of applications using smart contracts.

Ether, on the other hand, is the fuel that powers the Ethereum network, and the programmable money sold on cryptocurrency exchanges. 

The same way you’ll need gas for your car, ether is necessary for you to deploy and run applications on the platform. Ether is the power behind smart contracts and running DApps, token generation during ICOs, making payments, and facilitating transactions on the ETH blockchain.

In summary:

✅Ethereum is the platform; ether is what powers the platform

✅Ether can be bought and sold, Ethereum cannot

✅Ethereum has multiple applications; ether has a single application, enabling operations on the parent blockchain.

So, are Ethereum and Bitcoin similar?

Well, the two are similar in that they are both blockchain networks, but there are some significant technical disparities between the two. There is a very substantial difference between Bitcoin and Ethereum in both purpose and capability. While the former track’s ownership of digital currency, the latter’s primary focus is to support decentralized applications. 

In short, we can say that Bitcoin is a peer-to-peer currency that can be transferred instantly between transacting parties securely. Ethereum, on the other hand, supports smart contracts. And if you are wondering to yourself what a smart contract is, then you will be pleased to know that at the core of these Decentralized applications is a smart contract. So, what exactly is a smart contract?

What is a Smart contract in Ethereum?

A smart contract is simply a phrase coined to describe best “a computer code that can veto the exchange of property, money, content, shares, or anything valuable.” In blockchain language, a smart contract is a self-executing computer program that completes whenever certain conditions are met. It is a programmed code that runs without the possibility of third-party influence, fraud, downtime, or censorship.

All blockchains can process code, but most of them are limited. With Ethereum, it becomes different. Instead of allowing for limited operations, Ethereum lets developers create as many applications as they can, something never experienced before.

What are the uses of Ethereum?

The main use of Ethereum is to enable developers to create and deploy decentralized apps where these decentralized apps, also known as DApps, serve particular functions to users. By virtue of being built on a blockchain, decentralized apps are not controllable by any person or central system.

Ethereum can be used to decentralize any centralized service. From the existing intermediary services across a myriad of industries such as bank loans to other seemingly less interesting systems like voting and title registries, Ethereum can be used to get them all decentralized.

Another objective use of Ethereum is in the building of Decentralized Autonomous Organizations (DAO). This is an organization with no apparent leadership, run exclusively by programming code on a variety of smart contracts recorded on the Ethereum blockchain. The code takes the position of organization rules and structures, totally eliminating the need for a centralized control like in a traditional organization. Anyone who purchases tokens becomes a part-owner of a DAO, but instead of converting tokens to equity shares, tokens give people voting rights.

Ethereum is currently being accessed as a reliable platform for launching other cryptocurrencies. Following the ERC20 token standard laid down by the Ethereum Foundation, interested developers can also start their own versions and raise funds through an ICO. Through this strategy, token issuers set the amount of money they intend to raise before offering it in a crowd-sale in exchange for Ether. The last two years alone have witnessed ICOs raising Billions of dollars on the Ethereum platform.

Conclusion

For all the talk of decentralizing the system, Ethereum appears to be the ultimate solution. Its rise is suggestive of a market ready to embrace positive changes, and a platform for development in an area previously shadowed with uncertainties. It presents a bold claim for a futuristic technology unreliant on third-party forces, including social and political interferences. 

 

Categories
Cryptocurrencies

The Features and Uses of Cryptocurrencies

Unless you’ve been living under a rock, you must have heard or seen the buzzword “cryptocurrency” or at least “bitcoin” in financial headlines or somewhere else. The point is, cryptocurrency

Unless you’ve been living under a rock, you must have heard or seen the buzzword “cryptocurrency” or at least “bitcoin” in financial headlines or somewhere else. The point is, cryptocurrency

Unless you’ve been living under a rock, you must have heard or seen the buzzword “cryptocurrency” or at least “bitcoin” in financial headlines or somewhere else. The point is, cryptocurrency has captured people’s imagination with its intriguing technology and its potential to become a powerful global currency in the future.

Most people know about the existence of cryptocurrency, but its use remains elusive.  If you’ve been racking your brain with questions like: what’s the use of cryptocurrency? What characteristics define it? Why should I pay attention? We have the answers for you. 

Properties of Cryptocurrencies

In the digital currency space, cryptocurrencies have some inherent features that starkly differentiate them. Here’s what makes Bitcoin, Ethereum, Zcash, NEM, Stellar, and other cryptos special.

1. Free of permission

At the core of cryptocurrencies are open source software and consensus-driven technology. Anyone and everyone can access the software needed to mine, trade in, and to complete transactions using cryptocurrencies. Since it is not regulated by anyone, you do not need permission from any authority to use it. 

2. Immutable

In its simplest sense, immutable means “cannot be changed.” Once a transaction is done, it’s done. This means that it’s impossible for anyone in the entire world to move a cryptocurrency asset apart from the owner of the private key. Also, a transaction cannot be reversed once it’s on public record on the blockchain ledger. 

3. Highly secure 

Not only are cryptocurrencies encrypted with extremely complex algorithmic patterns, but they also have an extra layer of security in the form of blockchain technology. Blockchain’s decentralized and transparent nature is such that even if malicious parties manage to hack the system, there’s nothing of value to steal. 

Also, most cryptocurrencies have servers all over the world with thousands of nodes tracking all activity in the networks. This ensures that even if some servers and nodes fall prey to hackers, the rest of the nodes will continue running the system. 

4. Deflationary

Most cryptocurrencies have a capped market supply, rendering them scarce. For example, Bitcoin has a maximum issue of 21 million coins – and that is the total number that will exist, ever. This makes the currency a prized and attractive asset. As its demand increases, its supply remains the same. This increases its value over time, making it deflationary. Cryptocurrency owners never have to worry about their asset value decreasing. 

5. Anonymous and Pseudo-anonymous 

Since there’s no governing authority on cryptocurrency networks, users do not have to provide proof of identity while transacting on the networks. It’s anonymous in this sense. However, it’s pseudo-anonymous in the sense that when a transaction request is submitted, the decentralized system will verify it and record it on the public ledger. Any person who transacts is linked to a public address, though no one will know the actual name of the address.

6. Trustless 

The decentralized nature of cryptocurrencies is such that nobody has to trust anyone for transactions to occur. Users utilize a technique known as consensus to interact with each other without needing validation from anyone but the system. When a transaction is entered in the network, all nodes will receive it and verify if the digital signature is genuine or not. If it’s genuine, the nodes will record it on the blockchain. If it’s not, the nodes will flag the transaction and discard it.

Uses of Cryptocurrencies

Now that we’ve explored what makes cryptos unique, the curious part is whether they’re worth the hype. 

It turns out cryptocurrencies are very useful in the real world. At least in the areas below:

✅Low-Cost and Fast Money Transfer

Many cryptocurrency enthusiasts and users will acknowledge one of the finer purposes of cryptocurrency is their ability to send and receive money at incredibly fast speeds and impressively low costs. The speed of transactions is a very critical part of any financial system, and cryptocurrency excels at this.

When compared with the traditional payment systems which take several days, even the slowest cryptocurrency is lightning fast – with transactions of minutes, and others mere seconds. What makes this possible is: all that’s needed is for a miner to decipher an encryption, after which a transaction is confirmed.  

✅A Censorship-resistant Alternative to Wealth storage

The freezing of someone’s assets and cash is easier than most people think. This is especially true in jurisdictions with an unfair rule of the law. All it takes is to be accused of financial misconduct or to run afoul of powerful people. In such a scenario, it’s easy to find yourself with no access to cash, even if you are not guilty of any wrongdoing. 

With cryptocurrencies, this can never happen. This is because it’s only the holder of the bitcoin currency who has the key to access their bitcoin wallet.

✅Private Transactions 

Some cryptocurrencies such as ZCash and Monero are inherently privacy-centric – they enable users to make anonymous transactions on their network. This way, individuals do not have to be interrogated by a bank on where their money came from, why they are sending large amounts of funds and who the recipient of the money is.

This also makes them a welcome alternative to the usual labyrinthine process involved when you’re transferring a lot of money – an aspect that causes people on both ends to be stranded for days.

✅Cashless Remittances  

Non-cash remittances are more secure, more convenient, and easier to track. Cryptocurrencies are unparalleled in this regard – especially with their added characteristic of water-tight security courtesy of advanced encryption.  

For instance, Nigeria’s blockchain startup allows users to send money from anywhere in the world to a selection of African nations. Diaspora Africans can buy SureRemit’s tokens and use them within the mobile app version to purchase mobile airtime and pay utility bills for their loved ones in Africa.

Conclusion

Cryptocurrency has revolutionized the finance world with unique offerings which, going by current indications, will render it more dominant in our interactions with money. With its unique security system, cheap costs, and swift transaction speeds, it will continue to find more applications in the real world. 

 

Categories
Cryptocurrencies

Everything You Need to Know About Cryptocurrency and the Rise of Digital Currencies

Cryptocurrency has taken the financial space by a storm. It’s almost impossible to go for a week without hearing of a new cryptocurrency being launched or another one soaring to

Cryptocurrency has taken the financial space by a storm. It’s almost impossible to go for a week without hearing of a new cryptocurrency being launched or another one soaring to

Cryptocurrency has taken the financial space by a storm. It’s almost impossible to go for a week without hearing of a new cryptocurrency being launched or another one soaring to record highs, sending savvy investors rushing in. For most people, though, the concept remains foggy if not downright complicated. In this article, we break down everything about cryptocurrency, including: is it the same thing as digital currency?

Cryptocurrency is an internet-based medium of exchange. “Crypto” refers to the fact that the currency uses cryptography to secure and verify transactions and regulate the release of new units. One of the most defining features of cryptocurrency is that it relies solely on the internet: it has no issuing or regulating authority, nor is it bound by geographical restrictions.

Cryptocurrency or Digital Currency?

It’s easy to conflate these two terms, especially since financial analysts and the media often use them interchangeably. So what’s the difference after all? The key thing to grasp is that all cryptocurrencies are digital currencies, but not all digital currencies are cryptocurrencies.

Digital currency is the term for any form of money that’s available only in digital form. This money is not tangible like, say, coins. Digital money can be transferred from one person to another, be traded for another currency, and can be used to transact, just like physical money. It can also be sent to and received in any place in the world.

The defining difference between cryptocurrency and digital currency lies in one word: crypto. Cryptocurrencies are a form of digital currency that is based on cryptography – a technique that combines elements of art, science, and mathematics to convert readable text into unintelligible text so that information is secured from unauthorized parties.

If you’re looking to invest in cryptocurrency and are still confused about what it is or you just want to sound smart when you’re talking about digital currencies, then it helps to know exactly the difference between the two.

Differences between Cryptos and digital currencies

☑️Structure: Digital currencies are centralized, meaning their transactions are regulated by a particular entity, like a bank. Cryptocurrencies are decentralized, meaning regulation within the network is done by the community in the network.

☑️Transparency: Digital currency transactions are confidential. Cryptocurrency transactions are transparent and are in public record, i.e., anyone can see the transactions of any user since transactions are recorded on an open chain – the blockchain. 

☑️Potential for Manipulation: Digital currencies have a centralized system that can exert authority over transactions – like canceling or freezing them at the request of a legitimate party. Cryptocurrencies are not controlled by any authority, and cannot be manipulated. 

☑️Legal Status: Most countries have established a legal framework for digital currencies. For cryptocurrencies, the same cannot be said, at least currently.

Common Cryptocurrency Lingo

You don’t have to be the originator of Bitcoin to understand some of the most common “cryptocurrency speech” around. Here is a definition of some of the most used words to ease you into the world of cryptocurrency.

☑️Blockchain: Every new record in a cryptocurrency network is recorded as a “block.” It’s so-called because it’s resistant to alteration. Blocks are linked together by cryptography – hence “blockchain.”

☑️Mining: This is the process of verifying transactions before they are recorded on the blockchain network. Mining involves solving complex computational puzzles and decrypting codes.

☑️HODL: “Hold On For Dear Life,” meaning holding onto your cryptocurrency coins despite unfavorable market conditions.

☑️Altcoins: This is the name given to all other cryptocurrencies after Bitcoin – the first and most successful cryptocurrency to date.

☑️CAP: This is a shorthand of market capitalization, which means the total number of coins in supply multiplied by the going price.

☑️Peer to Peer: In a peer to peer model, two or more computers interact directly with each other without the intervention or presence of an intermediary.

The Rise and Future of Cryptocurrency

Only years ago, cryptocurrency was an academic concept explored without much success. That was until 2009 when the first cryptocurrency was launched and took the world by storm. Since then, thousands of cryptocurrencies have been launched with varying levels of success. Today, the cryptocurrency model is being explored by institutions: including governments and financial institutions to make processes more efficient and secure 

If the success of Bitcoin, the most popular cryptocurrency, is anything to go by, then the future of cryptocurrencies is bright. Other cryptocurrencies such as Ripple, Ether, Litecoin, and Cardano have commanded a significant share of attention and investment. Initial Coin Offerings (ICOs), akin to the shares of a company, continue to generate excitement and interest in the crypto market.

How Can You Buy and Use Cryptocurrency?

The most important thing is to know how you can benefit from cryptocurrency and how to stay safe while doing so. Whenever you purchase a cryptocurrency, you become the owner of a private key to the wallet address of the coin(s).

With this key, you can access and spend your bitcoin to pay for things or transfer to anyone. Where you place your key is crucial because it means the difference between holding your valuable coins and losing them. So, how do you safeguard your coins? Innovative individuals and companies have come up with crypto wallets that, apart from protecting them from theft, enable you to store, send and monitor their balance. Here are the various types of wallets available today.

Desktop wallets: This type of wallet allows you to send and receive cryptocurrency addresses on your computer. An example is Cryptonator, which enables you to store several cryptocurrencies in one account.

Online wallets: These are web services that allow you to store your cryptocurrencies online. You can access them anywhere, anytime. 

Mobile wallets: These are apps that allow you to encrypt your cryptocurrencies and pay for services right from your phone.

Paper wallets: These are pieces of paper with QR codes on them, one being the public address at which you receive your cryptocurrency, the other being your private address where you send them.

Hardware wallets: These are USB devices that store bitcoin electronically and keeps your private keys.  

Conclusion

By now, you should have a fair understanding of this exciting thing called cryptocurrency. Though a bit daunting at first, it’s an exciting and revolutionary technology with something to discover every day. Remember, like with everything, the more you learn about it, the more you get comfortable and possibly invest in its ever-growing potential.

 

Categories
Crypto Daily Topic

Whale Transfers and Their Influence on Bitcoin Price

If you are a bitcoin enthusiast or trader, you probably know that the markets are prone to price swings triggered by such things as government regulations, market news, and the

If you are a bitcoin enthusiast or trader, you probably know that the markets are prone to price swings triggered by such things as government regulations, market news, and the

If you are a bitcoin enthusiast or trader, you probably know that the markets are prone to price swings triggered by such things as government regulations, market news, and the good old supply and demand.

But are you aware of a lesser-known factor that could cause BTC prices to plummet, spike, or even affect their market value? Whenever you’ve seen a sudden boom or a decline in BTC prices, it’s very likely those movements were caused by a “whale.”

But what are Whales in Crypto Space? 

Whales are known to have an enormous size and sheer strength. In cryptocurrency trading, whales are the biggest and most influential players in the “ocean.”

The reference to whales in crypto trading originates from traditional financial markets and gambling circles. The very term “crypto whales’ should give you a clue of the utter power of these players. It’s not hard to realize that a single transaction made by them is enough to cause waves that will reverberate throughout the cryptocurrency ecosystem.

Who are the Bitcoin Whales?

The forefront question at this point is; just who are these so-called whales? Are they individuals, investment companies, are they even known at all? The answer is yes, and no.

Whales can be people with enormous amounts of capital to invest in cryptocurrencies, or they can be finance institutions like trusts and hedge funds. And yes, some whales are well-known people, beginning with bitcoin’s very creator – Satoshi Nakamoto, who is estimated to own at least a million bitcoins. Whales that are companies include Pantera Bitcoin Fund and Fortress Investment Group.

Currently, 40% of bitcoin is owned by just a thousand people. This means there are many anonymous whales in the market – and their movement could change the entire bitcoin landscape if someone decided to sell large portions of their holding.

How Whales Affect Bitcoin Prices  

The activity of whales can impact crypto markets significantly. Prices can dramatically decline or shoot up, and the market value can increase or decrease. When whales buy or sell a cryptocurrency, they do so in tens or even hundreds of millions, sending prices plummeting or spiking.

When a whale buys out massive volumes of BTC, it will drive the value of BTC high because it sends the signal that it is in demand.  The opposite is true for whale sell orders. BTC prices will drop because it will look like the currency is being disposed of, diminishing its value in the eyes of investors. 

To grasp the impact that whales can trigger on the market, consider when two anonymous whales sold over 13,000 BTC in 2018 (total value of the sell was more than $100 million). This fact caused the price to decline by a whopping $200 in just under 20 minutes.

Whale-Watching: How to Detect Whale Movement

In the crypto trading sea, it’s wiser to swim along with whales than to move in the opposite direction. So if you’re looking to buy or sell bitcoin, why not wait for a whale to emerge first?  Below are some clues that can help you spot whales on the horizon – before they make a big splash. 

Detecting When a Whale Is Buying:

If you’re a “small fish” wishing to buy bitcoin, doing so at the same time as whales can guarantee you good profits with low risks. Here are some tips for detecting when whales are buying:

☑️ Look For an Increase in Volatility and Price When the Markets Are Quiet 

If bitcoin has been trading at roughly the same price and suddenly there’s larger-than-normal volatility and price, there could be a whale or several whales who have entered the market.

☑️ Look Out for Strange Bid Sizes in the Order Book

Keep an eye out for significant increases in order books. If you spot a sudden swell in bid sizes, a whale might be in play. For instance, suppose the usual bid size is 1000 and the ask size 2000. When a crypto whale is trading, the order book will register abnormally high bid sizes.

Detecting When a Whale Is Selling

The very act of whales placing sell orders is risky for traders holding smaller positions because this usually liquidates huge sums of the asset. In this scenario, you don’t want to hold on to your bitcoins very long. Here’s how to track a selling whale:

☑️ Check Abrupt Cancellation of Large Buy Orders

If you just noticed big buy orders quickly vanish from the order book, there is a possibility that a whale or a group of them is about to do a massive offload (selling in large quantities).

☑️ Look Out For a Sudden Uptrend that quickly disappears

Did you notice a sudden surge in price momentum, which quickly disappears as fast as it came? It’s highly unlikely this change was triggered by market news or a disruptive news story. It signals the presence of a whale. 

☑️ Look out for A Strong volume Acceleration 

A rapid increase in volume is another indication a whale is in play. But just how big of a jump should you watch out for? Usually, you want to be on the lookout for more than 3x larger than the routine volume.

Conclusion

The inherent nature of crypto prices is they will always drop and spike from time to time. This is what makes cryptocurrency trading possible (and fun) because investors are betting against future movement of prices. Crypto whales are one of the most powerful price movers. Understanding what they are and when they are going to move could help you make more accurate and profitable trades.